NAFTA also had six disadvantages.
First, it led to the loss of 500,000-750,000 U.S. jobs. Most were in the manufacturing industry in California, New York, Michigan and Texas. Companies in some industries moved to Mexico because labor was cheap. These industries were automotive, textile, computer and electrical appliance.
Second, job migration suppressed wages. Sixty-five percent of companies in the affected industries threatened to move to Mexico. The U.S. workers remaining in those industries could not bargain for higher wages. Between 1993 and 1995, 50 percent of all companies in the industries that were moving to Mexico used the threat of closing the factory. By 1999, that rate had grown to 65 percent. (Source: Kate Bronfenbrenner, "
Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages, and Union Organizing," Cornell University, September 6, 2000.)
Third, NAFTA put Mexican farmers out of business. It allowed government-subsidized U.S. farm products into Mexico. Local farmers could not compete with the artificially low prices.
Fourth, as Mexicans lost their farms, they went to work in sub-standard conditions in the
maquiladora program.
Fifth, U.S. companies degraded the Mexican environment to keep costs low.
Sixth, NAFTA allowed Mexican trucks access into the United States. Mexican trucks are not held to the same safety standards as American trucks. Therefore, Congress prohibited this provision. For more, see
NAFTA Disadvantages.
